Aconex and NextDC

Question

I am unsure from a fundamental/technical analysis viewpoint what would be a reasonable floor price for ACONEX (ACX), and also NEXTDC (NXT).. appreciate your thoughts on both, as both have high PE ratios, good potential upside, but sold off dramatically in recent times

Answer

Hi, no idea about a floor price but these arent the kind of businesses you can simply stick a multiple on as both companies are still building scale. They attract high upfront costs and generate high margin incremental revenue for a long time. They are hard to value which is why they are so volatile. We are currently looking into NextDC and will let you know if it looks interesting.

Q.
Has II looked into Acconex (ACX) the technology company providing very advanced software for construction projects globally? Their revenue growth has been strong and a capital raising for an acquisition was very heavily oversubscribed.

Q.
Hey James, as part of your IT roundup, did you manage to stumble across a company called NextDC? It might be a bit small for II, but any thoughts on NEXTDC and companies looking to leverage off the move to more cloud based services? Cheers.

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